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Despite A 21% Revenue Dip, Airtel Records Win In Q3

Airtel launches 5G network

In what appears to be a profitable year for Airtel Africa, a subsidiary of India’s Bharti-Airtel, the telecom giant, however, reported a revenue dip of 21% year-on-year (YoY).

This surfaced in the company’s financial report for the period of 9 months ending December 2020.

The report was released on Friday, January 29, 2020.

According to the report, the telecom giant raked in a net profit of $261 million for the period under review.

In comparison, the latest financial performance is a decline from the corresponding period in 2019 which stood at $351 million.

Overall, the telecom giant reported an increase in its underlying revenue.

This grew by 13.8% at $2.87 billion over that of the corresponding period in 2019 at $2.52 billion.

Airtel Reported A Profitable Year with a Revenue Dip of 21% | Techuncode.com

TheBusinessIntelligence: Raghunath Mandava, Chief Executive Officer, Airtel Africa

Interestingly, almost half of the network provider’s total revenue for the stipulated period was generated from Nigeria, its biggest market.

The East Africa and Francophone regions, however, contributed significantly to the overall generated revenue.

In its explanation, Airtel Africa claimed the reduction in its yearly finance was “largely due to one-off items incurred in the same period in the prior year.”

Voice revenue continues to thrive while data and mobile money revenue shoots rapidly

Like every other year, voice call revenue remains the biggest revenue driver for the telecom giant.

According to the report, voice revenue reached $1.5 billion during the 9-month period, which is about 5% growth from the $1.4 billion recorded in 2019.

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Regardless, data and mobile money revenue also witnessed an unprecedented boost with both accounting for 24.4% and 27.8% respectively.

Although the voice revenue is slowing down, data and mobile money appear to be the next biggest growth driver for Airtel.

Going by Airtel’s financial report, data revenue for the period ended December 2020 was $842 million, up from $677 million in 2019.

What is responsible for the surge in Airtel’s data revenue?

While the boost is very marginal, it isn’t surprising for many reasons, some of which include the effect of COVID-19.

During the height of the pandemic where nations were forced to lockdown, people’s internet usage soared significantly.

Hence, the positive revenue in that area.

Also, Airtel recently disclosed that in Nigeria, its biggest market, 82% of its total sites have access to 4G broadband network.

Similarly, the telecom giant reported that at least 72% of its sites in the Eastern market are also connected to the 4G network.

Undoubtedly, the wider reach of Airtel’s 4G infrastructure led to the increase in data usage per customer; subsequently boosting the overall data revenue.

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“Our nine-month performance reflects both the resilience of our business model through the Covid-19 pandemic and, for the last six months, a continued improvement in our execution and performance as lockdown restrictions have eased across our countries of operation,” said Raghunath Mandava, CEO, Airtel Africa.

To add more context to this, data customers in Nigeria increased by 23.6% while that of Eastern Africa by 21.2%.

This boost in data customers further increases data usage per customer to an average of 45% across both countries.

Specifically in Nigeria, data usage per customer increased to approximately 49.2%.

Generally, Airtel now boasts of over 118 million subscribers in the 14 African countries where it is established.

In comparison, the current total subscribers grew by 11% YoY over the total recorded as of December 2019.

Airtel subscribers to stall amidst NIN-SIM Card linkage in Nigeria

Due to the new SIM Card policy in Nigeria, Airtel’s subscription rate in the country may be affected.

Currently, Nigeria has stopped the sales and registration of new SIM Card, pending while it completes the ongoing NIN-SIM Card linkage activity.

Airtel Reported A Profitable Year with a Revenue Dip of 21% | Techuncode.com

Source: TheGuardianNG

While the decision was made out of goodwill by the Nigerian government; there will be a ripple effect on the telecom giant.

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Airtel said that it has collected NIN information for at least 21 million mobile subscribers till date.

This figure makes up about 47% of the entire 44.4 million Airtel customers based in Nigeria.

“To complete the registration process we still need to verify the NIN information we have received from our subscribers with the NIMC.

“We anticipate that this will affect customer growth in Nigeria in Q4’21, but the potential overall impact remains uncertain,” Mandava added.

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